Argentine state-controlled energy company YPF has signed an agreement with Chevron Corp. outlining the commercial terms and conditions for developing the Vaca Muerta shale oil and gas field in the country’s southwest.
The accord signed Friday in Buenos Aires with the San Ramon, California-based supermajor “is a step prior” to a final agreement, which is expected to be inked in July, YPF said in a statement.
Under the initiative, first announced last December, Chevron is to invest up to $1.5 billion in a pilot program aimed at developing shale deposits in the Loma La Lata Norte and Loma Campana blocks of Vaca Muerta, located in the southwestern province of Neuquen.
The pilot project will involve the drilling of more than 100 wells over the next 12 months, YPF said.
YPF announced the discovery of non-conventional oil and natural gas reserves in Vaca Muerta in 2011 after successful results in the exploration phase.
Development of that region, which has already begun on a small scale, is seen as a solution to Argentina’s current energy deficit.